The Russian president made the statement at a conference of military leaders in Sochi on Wednesday.
He warned that major enterprises, both state-owned and private, must be prepared to make a quick transition during wartime.
In a statement released by the Kremlin, Mr Putin said: “I want to say that the economic ability to increase the production of defence products and services quickly is a vital element of military security.
"All strategic and simply large companies, regardless of the type of ownership, must be able to do this."
The President continued a series of meetings with officials from the Defence Ministry and the defence sector. The results of the Zapad-2017 military exercise were discussed at the latest meeting https://t.co/xAeKolvu62pic.twitter.com/AdxiAGmpQu
— President of Russia (@KremlinRussia_E) November 22, 2017
He added that he and senior defence officials already issued instructions to modernise production in 2015 and 2016, asking those in attendance to report which problems of the previous years had been dealt with and which had not.
Mr Putin said: "Instructions were issued to modernise production, to create a reserve of material and technical resources, and to ensure the transportation of military personnel.
"The ministries and agencies are working on this in close cooperation with the Defence Ministry under the guidance of the Board of the Military Industrial Commission."
The president held a series of meetings with officials from the Defence Ministry and the defence sector to discuss the results of the Zapad-2017 strategic military exercise, which assessed military readiness.
Russia sent 3,000 troops to Belarus, where they trained at six locations with 7,000 soldiers and officers from the host nation, according to news channel RT.
In a separate meeting in Sochi, the Russian leader met with leaders of Iran and Turkey to discuss the Syrian peace settlement on Wednesday.
He said: "Much has been done to stabilize the situation in Syria. I hope that in the very near future we will put the final point in the fight against terrorism in Syria, although it is clear that the centres will still exist, they will still emerge.
"So there are still problems with terrorism in the world, and in the Middle East, and in Syria in particular."
Mr Putin added: "But the main task is already close to completion, and it will be possible to say in the very near future that we have solved it."